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S. Sudan’s economy needs revival through peace – JMEC

Author : @er | Published: Tuesday, May 15, 2018

JMEC Chairman Festus Mogae addressing the media, 14th May 2018 | photo | Hellen Achayo

The Chairperson of the peace monitor – JMEC – has emphasized the need for parties to the Revitalization Forum to end the conflict so that the country can embark on programs for economic recovery, reforms and development.

The government is said to have accumulated $290m  in arrears.

It’s not clear how the interim government accrued these debts, but Festus Mogae said part of credits are related to oil production fees.

“The situation is not any better. The net disposable revenues available to finance the TGoNU 2017/2018 budget have declined markedly due to repayment of arrears resulting in an increased deficit,” he told the media on Monday.

Mr Mogae, a Botswanan economist and former president, said the TGoNU is currently delivering two-thirds of the oil share to Sudan in kind.

As a result, he said despite the increase of oil prices in the international market, the government’s cash flow, particularly the 2017/ 2018 budget, declined significantly due to the increased deficit.

Last week, the International Monetary Fund said South Sudan was among Sub-Saharan African nations that are at growing risk of debt distress because of heavy borrowing and gaping deficits.

Mogae went on to say that despite the government’s effort to improve the economy, inflation is still fueled by availability of parallel markets for the exchange rate:

“The exchange rate against the US dollar continues to deteriorate despite efforts by the government to curve activity in the black market and increase the availability of foreign currency.”

Last week, the Council of Ministers also lifted fuel subsidies so that the funds can be used to implement other projects such as payment of salaries of government employees.

Mogae said this is a progress made by the Transitional Government but more remains to be done in order to realize the level of savings.

He said the only way to improve the economy is to end the conflict in the country.

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